I bought a lot of stuff and made some mistakes along the way but in the end I got 'er done! Ebay is a wonderfull source for replacement iPhone parts. I initially just bought the glass thinking I could go this route. I got a good deal, about $5 for glass, but the glass is actually adheard to the digitizer. You can fix it this way but it is a lengthy and dificult process and you risk damaging other parts. Here is a video showing this method. After watching this you can see, not the best way to do it.
See what I mean?! The above method not only takes way too long but is dangerous. As the glass cracks it does fly around, so I recommend eye protection!! I nearly crapped myself when he brings out the HUGE knife!! LOL! Want to lose a finger?!?!
The method I would recommend is to replace the entire assembly. That cost me between $30 and $40 on eBay. Below is the video supplied by directfix that I used as a guide. I recommend watching the entire video before doing anything to get a feel of what needs to be done then starting it from scratch, pausing along the way as you follow the steps. I'll include the reassembly video as well:
The parts and tools you'll need are:
A replacement digitizer
Replacement Adhesive Stickers
iPhone Opening Tools
A Heat Gun or Hairdryer